An East Japan Railway Co. shinkansen departs from Tokyo Station in May 2015. Last month, State Minister of Transport Takao Makino presented his Thai counterpart with a report for a 670 km bullet train running from Bangkok to Chiang Mai. | BLOOMBERG

A Sino-Japanese tug of war taking place in Thailand

KYOTO - Japan and China have become locked in a subtle competition for increased influence in Southeast Asia. And Thailand has played a part in intensifying such competition. Seeking to cement ties with Japan and China to lessen the impact of Western sanctions, the Thai junta has allowed the two countries to exploit its political crisis for their national interests. Thailand has undoubtedly emerged as the region’s critical playground for the Sino-Japanese rivalry.

Investments in mega-projects is one key area in which Japan and China have competed fiercely in Thailand. The two countries have their eyes particularly on high-speed train projects, which could earn them billions of dollars.

Late last year, China began the first phase of construction of Thailand’s first ever high-speed railway from Bangkok to Nakhon Ratchasima province in the northeastern region. The junta rushed to celebrate the success of Chinese investment after years of debating whether Thailand was ready for such a mega-project.

Chinese Prime Minister Li Keqiang stated publicly that the Sino-Thai high-speed railway was a flagship project within the much publicized “One Belt, One Road” initiative in the spirit of “wide consultation, joint construction and shared benefits.” Thailand has been assigned as a major gateway in the OBOR initiative — an idea that resurrects the ancient Silk Route.

China is responsible for the supervision of the construction of the 253-km railway, the design and the manufacturing of trains and signal systems. The maximum speed will be 250 km per hour. After completing the first phase, the next step will be to connect Nakhon Ratchasima with the border town Nong Khai, adjacent to Laos. This will be where the Sino-Thai railway meets with the Sino-Lao railway, thus physically linking Thailand and China.

China hoped that the rail-link project will contribute to infrastructure development and reinforce connectivity in Thailand and the region. China was keen to expedite the two phases of the project as a way to strengthen its bilateral ties with Thailand. This clearly reveals a Chinese policy of promoting pragmatic and strategic cooperation with its neighbors in the region.

The top leaders from Thailand and China attended a ground-breaking ceremony in Bangkok. The Thai side included Prime Minister Prayuth Chan-ocha, Transport Minister Arkhom Termpittayaphaisith, and Interior Minister Anupong Paochinda. The Chinese delegates included Wang Xiaotao, deputy director of the National Development and Reform Commission of China, and Chinese Ambassador to Thailand Lyu Jian.

Prayuth said that the Chinese rail project, to be operational late 2022 or early 2023, would transform Thailand into a regional transport and logistic hub. He thanked the Chinese government for enthusiastically supporting sustainable development in his country. On a deeper level, the Chinese investment indicates a greater degree of cooperation between the two countries. But it also sent out a worrying signal to other powers about the unstoppable Chinese influence in the region.

Japan, carefully observing the Sino-Thai ties from a distance, has been eager to counter China’s rising influence by proposing its own investment project for high-speed trains in Thailand. Japan has proposed a project of greater scale, with a 670 km high-speed rail stretching from Bangkok to the northern city of Chiang Mai. But currently the two countries are encountering several technical and financial problems.

Due to financial constraints, the Ministry of Transport of Thailand has launched a new study to have the train’s maximum speed lowered to reduce the overall cost of the construction. Originally planning at the maximum speed of 300 km per hour with the total cost of $12.5 billion, Thailand has sought to curb the speed to 180-200 km per hour instead. Moreover, Thailand has been reconsidering the nature of the contract, switching from a government-to-government, to a public-private partnership.

Deputy Prime Minister Somkid Jatusripitak reportedly said, “Earlier, the high-speed train project was considered worth the investment as it aimed to connect to China via Yunnan but now China has constructed a rail project through Laos and Thailand that will link with the Thai-Sino high-speed train project which will extend to Nong Khai. As a result, the Bangkok-Chiang Mai high-speed train project should be reviewed as this project cannot link to other provinces and neighboring countries.”

However, Thailand has confirmed that the project with Japan will go ahead and could begin the construction this year. The first phase of the construction will connect Bangkok and Pitsanulok, a 380 km railway with a budget of $8.5 billion. It is likely that the Thai Cabinet will approve the deal with Japan in the next few months. The second phase will extend the line from Pitsanulok to Chiang Mai and the fare of the entire journey will stand at about $40 one way.

The ongoing railway projects from China and Japan, while responding to the logistic needs of Thailand, reflect a complicated regional politics in which the two powers are battling ultimately for domination of the political and economic landscape of Southeast Asia. For Thailand, playing one power against the other has long been a shrewd strategy. It encapsulates the characteristic of Thai diplomacy as flexible, like a bamboo tree in the wind.

China has long regarded Southeast Asia as its sphere of influence. Hence, its mega-project in Thailand is part of its plan to firm up its footholds in the region.

For Japan, the urge to counterbalance China’s growing Chinese clout in Southeast Asia has driven it to become more assertive toward Thailand. Investing in a high-speed train in Thailand, in the eyes of the Japanese leadership, will not only maintain the regional balance of power, but also reaffirm Japan’s interests in that part of the world.